Australian Stock Market Report – Midday 8/24/2012

MIDDAY REPORT
(12.30pm AEST)

The Australian sharemarket is losing ground following yesterday's modest improvement. The All Ordinaries Index (XAO) is down 0.8 pct or 37.3 pts to 4374.5.

Global markets ended mostly lower last night, with shares in the U.S down by close to 1 pct. Economic news in the world's largest economy was disappointing, with the number of new homes sold last month rising by a lower than expected 3.6 pct.

Almost all sectors are losing ground at lunch, with the telcos managing to post some modest gains. Telstra (TLS) is up 0.54 pct or 2 cents to $3.73; however weakness from the mining, energy and financial sectors are holding the rest of the market back.

Australia's second largest miner, Rio Tinto (RIO) is down 3.7 pct or $2.01 to $52.17 while BHP Billiton (BHP) is down 1.68 pct or 57 cents to $32.84. The four major banks are all in the red, with ANZ Banking Group (ANZ) down 0.6 pct or 15 cents to $24.85. National Australia Bank (NAB), Commonwealth Bank of Australia (CBA) and Westpac (WBC) are all down by around 0.5 pct.

The profit reporting season continues, with Australia's largest supermarket chain, Woolworths (WOW) announcing a 15 pct slide in Net Profit After Tax (NPAT) to $1.82 billion. Its bottom line was impacted by the restructure of its Dick Smith Electronics chain. Sales rose at most of its divisions, including at its 870 odd supermarkets. WOW is down 2.07 pct or 61 cents to $28.88.

NSW based coal producer, Whitehaven Coal (WHC) announced a NPAT of $62.5 million. One of Australia's richest people and the owner of the Newcastle Knights, Nathan Tinkler pulled out of his $5.3 billion bid to buy the company after a period of due diligence. WHC kicked off trading for the session at 10.50am (AEST) and is down 11.21 pct or 39 cents to $3.09.

On the economic front, the Reserve Bank Governor, Glenn Stevens said that the peak of the resource 'investment' boom as a share of growth will occur within the next year or two. He expects the rate of resource investment to subsequently decline, only to have the export of the resources themselves pickup.

Following the end of daylight savings, major Asian markets will be trading between the hours mentioned below until October this year.

The Hong Kong sharemarket trades in two sessions each day and will now open for trade between 11.30am (AEST) and 2pm (AEST) while the second session is between 3.30pm (AEST) and 6pm (AEST).

Out of Japan, the first session will be between 11am (AEST) and 1pm (AEST) while the second session is between 2.30pm (AEST) and 5pm (AEST).

The Singapore exchange will be open for trade between 11am and 2.30pm (AEST) for the first session and then between 4pm and 7pm (AEST) for the second.

U.S futures are currently pointing to a slightly stronger start to trade tonight. Dow futures are up 11 pts. The U.S market trades between 11.30pm (AEST) and 7am (AEST).

So far in trade at lunch, 885 million shares have been traded worth $1.77 billion. 284 shares are up, 489 are lower and 303 are currently unchanged.

The Australian dollar (AUD) is buying US104.3 cents, €83.1 cents and £83.1 pence.

The AUD is the world's fifth most traded currency behind the U.S dollar, the Euro, Japanese Yen and British Pound. The AUD accounts for around 7 pct of all foreign exchange trades.

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